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RMG400 Final review notes for Ch.4.docx

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Ryerson University
Retail Management
RMG 400
Hong Yu

Ch.4 Obtaining Assistance for Making Buying Decisions MARKETING RESEARCH • The systematic process of gathering, recording, and analyzing information about problems related to marketing; involves using information or data from many sources. Using Marketing Research One of the most frequent uses of marketing research is to locate information that describes current economic and market conditions that would help you better understand the environment in which you store operates. • Developing a customer profile will help you make day-to-day business decisions such as selecting products to purchase and choosing which types of promotion to use. • Determining an area’s unemployment rate, new housing starts, and other similar economic data can be used to make forecasts about future sales. Ex of economic data that buyers use are commodity prices, building permits, unified orders for durable, stock prices, consumer confidence, new plants/equipment, unemployment claims. • Many times buyers are faced with conflicting data when making a decision Good marketing research allows you to anticipate and capitalize on changes occurring with customers. The size of your store will affect how marketing research is conducted—most small retailers can’t afford the money or the time to analyze hundreds of customer surveys so they rely on newspapers or magazines or observing customer (informal surveys) Collecting Data • Your first step should be to locate all relevant data from secondary sources (little or no cost): – Government agencies – Newspapers – Trade journals – Trade associations In many situations, secondary data is not enough to help make a decision, need to collect primary data: • Primary data is collected by interviewing consumers • The key advantage is that it specifically relates to the problem being researched • Obtaining primary data may be time-consuming and expensive When conducting marketing research, you are looking for answers, not just information; study the data that you have collected and determine their meaning. INTERNAL SOURCES include: • Store records • Management • Sales associates Store Records • Increasingly, retailers are tracking more than just total sales, including types of products that customers generally purchase together or characteristics of customers who purchase a particular product • The key limitation to relying on sales and inventory records to predict consumer demand is that they reveal only what you customers have purchased or not purchased; does not reflect what the customer would have purchased if the merchandise had been in stock. Some stores operate a formal Want slip system: A form is completed each time a customer requests a product not in stock. Could help plan future merchandise assortments if a large number of you customers are making similar requests. Cannot meet every customer request. Management • Essential for buyers located at the headquarters of a retail chain. In large stores, you probably need to consult with your merchandise manager as you plan your purchasing decisions. Before approving your merchandise plan, your merchandise manager may suggest changes. – The merchandise manager can help: • Improve your merchandise plan • Predict economic and market trends – The finance officer will need to be consulted on your buying plan Sales associates You should obtain input from the store’s sales associates. Records may reveal what merchandise is selling or not selling, but only sales associates may be able to tell you why it is selling or not. - Sales associates are in continuous contact with customers and are aware if their wants and needs which may not be reflected in sales records. - are the store’s personal representative to its customers and are in a position to conduct primary research for you. May reveal if they have been asked for merchandise that the store does not sell. Ex: they can ask about a customer’s satisfaction with past purchases or they can get requests for items not carried by the store -during telephone conversations or store meetings, you should be able to determine which sales associates are the most insightful and can offer you genuine feedback. Discuss with them what should be in stock and allow them to inspect new produ
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